Legal FAQs for REALTORS®
Licensing

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Legal disclaimer

What is a duly registered manufacturer, retailer, or broker? (updated Jan. 1, 2002)

The Manufactured Housing Standards Act specifies three categories for persons in the business of selling manufactured housing: 1. A manufacturer "constructs or assembles manufactured housing for sale, exchange, or lease-purchase." [Sec. 3(3)] 2. A retailer is "engaged in the business of buying for resale, selling, or exchanging manufactured homes or offering such for sale, exchange, or lease-purchase to consumers." [Sec. 3(2)] A person is not a retailer unless he sells, exchanges, or lease-purchases two or more manufactured homes to consumers in any consecutive 12-month period. A person who maintains a location for the display of manufactured homes is considered a retailer. 3. A manufactured-housing broker is "engaged by one or more other persons to negotiate or offer to negotiate bargains or contracts for the sale, exchange, or lease-purchase of a manufactured home." [Sec. 3(6)] The act clarifies, however, that the term manufactured-housing broker does not apply if the manufactured home is "affixed to a permanent foundation, the manufacturer's certificate or the document of title is canceled, and the home is offered as real estate." In those instances, the provisions of the Real Estate License Act apply.


Can an unlicensed person be a property manager? (updated March 3, 2013)

It depends. A license is required for anyone who controls the acceptance or deposit of rent from a resident of a single-family property if the person has the authority to do any of the following:

-Use the rent to pay for services related to management of the property
-Determine where to deposit the rent
-
Sign checks or withdraw money from a trust account.

In addition, only a licensed broker or salesperson may perform leasing activities, such as finding tenants, showing properties for lease, and negotiating leases. However, there are certain activities that do not require a license, including bookkeeping or arranging for repairs.


Other important considerations (updated Jan. 1, 2002)

The Texas Manufactured Housing Standards Act prohibits the negotiation of a sale, exchange, or lease-purchase of a manufactured home to a consumer unless the appropriate seal or label is affixed to the home. In addition, a person who sells, exchanges, or lease-purchases a used manufactured home must provide a written warranty that the manufacture home is habitable.


Can my unlicensed assistant call potential buyers and sellers and make an appointment for a licensed agent to talk to the prospect? (Updated Jan. 30, 2015)

No. This is often referred to as telemarketing, and only a licensed real estate broker or salesperson may make such calls. Both the Real Estate License Act and TREC rules make it clear that all solicitation work must be conducted by licensees.


Who regulates the sale of manufactured housing in Texas? (updated Jan. 1, 2002)

The Texas Department of Housing and Community Affairs (TDHCA) is charged with enforcing the Texas Manufactured Housing Standards Act (Art. 5221f, Texas Revised Civil Statutes). The act provides that a person may not offer to sell, exchange, or lease-purchase a manufactured home without being a duly registered manufacturer, retailer, or manufactured-housing broker. The act makes an exception for owners who do not sell more than one manufactured home within any consecutive 12-month period, as well as an exception for real estate on which a manufactured home has been permanently attached and affixed.


My client wants to hold an auction to sell her house. Since I’m a licensed real estate agent, can I call the auction? (Updated Dec. 4, 2015)

No. You must be licensed as an auctioneer by the Texas Department of Licensing and Regulation to call an auction. Your real estate license alone doesn't authorize you to act as an auctioneer.


Can I list a property that's not located in Texas? (Updated April 28, 2014)

Maybe, but you must first consider Texas licensing law, the REALTOR® Code of Ethics, and the licensing law of the other state to determine if the listing is allowed and appropriate.

Your Texas real estate license permits you to practice real estate while you are physically located within Texas, regardless of the location of the property or your client’s residence. You can market the property and conduct negotiations on behalf of your client as long as those negotiations are done within the borders of Texas. However, Article 11 of the REALTOR® Code of Ethics states that a broker should not perform a service or handle a transaction for which he lacks the requisite knowledge or expertise.

Therefore, it might be better to have a broker who’s licensed in that state help you with the sale or handle the entire transaction through a referral if you aren’t familiar with that state’s laws, contracts, or closing procedures. The Texas Real Estate License Act and TREC rules permit a Texas broker to cooperate and share commissions with brokers licensed in other states as long as all negotiations within Texas borders are handled by Texas licensees.

Be aware that all states have licensing laws or commission rules that restrict or prohibit the practice of real estate by people not licensed in their state. For example, TREC rules interpret the Real Estate License Act to require that out-of-state brokers be licensed in Texas if they are conducting business from another state and the buyer, seller, and property are located in Texas. You should contact the state’s real estate regulatory body to determine the restrictions on practice in that state.


One of my agents is the trustee of an estate located in Sacramento, California, and is one of the beneficiaries. Can he be the listing agent of that estate even though that property is in another state and he does not have a real estate license in California? (updated Oct. 22, 2012)

Your agent would be best served by contacting a California attorney or the California Department of Real Estate (CDRE), which is equivalent to the Texas Real Estate Commission (TREC) in our state. CDRE can be reached toll-free at 877/373-4542 or found on the Internet at http://dre.ca.gov. Each state is responsible for determining the permissibility of an out-of-state agent listing a property for sale. Under Texas law, a person acting under the authority of a will or a written trust instrument does not have to obtain a Texas real estate license in order to sell real property in Texas. Unfortunately, Texas law means nothing in California.


I sponsor several agents who work out of their homes. I have a license for the main office, but another broker told me that I’m required to also have a branch-office license for every agent’s home. Is that true? (Updated May 29, 2015)

It depends on the activities your agents perform in their homes. Section 1101.552 of the Real Estate License Act provides that a broker who maintains more than one place of business must obtain a branch-office license for each additional office.

But what is “a place of business”? TREC rule Section 535.112 defines it as a place where a real estate license holder meets with clients and customers to transact business.

So, if your agents meet with clients or customers at their homes to transact business, you must obtain branch-office licenses for each of those homes. If your agents never meet with clients or customers at their homes to transact business, then no branch-office license would be required.


I'm a licensed real estate sales agent, and I'm working with a client who wants to sell his manufactured home. Do I need to be licensed by the Texas Department of Housing and Community Affairs as a manufactured-housing broker to negotiate the sale of my client's property? (Updated Nov. 20, 2015)

Whether you need to be licensed as a manufactured-housing broker by the TDHCA depends on the property and your recent transactions.

You can take part in the transaction without becoming licensed as a manufactured-housing broker if three criteria are met: 

1. the home is attached to the real property,
2. the same person is the record owner of both the manufactured home and the real property, and
3. the sale or lease occurs in a single real estate transaction.

There's also an exemption to the licensing requirement if those elements don't apply and you haven't negotiated any manufactured-housing transactions in the past 12 months.

However, if the above elements don't apply and you have negotiated any similar transactions in the past 12 months, you would be considered to be acting as a manufactured-housing broker by negotiating this sale and must be licensed by the TDHCA to comply with state law.


What tasks can my unlicensed office manager do? (updated April 29, 2014)

Unlicensed individuals can train or motivate agents, as well as handle office administration and personnel matters. Texas Real Estate Commission Rule 535.2 (c) notes that who a broker designates to sign checks is not regulated by the commission, so an unlicensed person can also serve as bookkeeper for the company.

However, TREC Rule 535.4(d) prohibits an unlicensed person from directing or supervising agents in their work as licensees. This means an unlicensed person cannot advise agents about helping others buy, sell, or lease property. Unlicensed office assistants cannot review contracts or be a party in dealmaking. These tasks may only be performed by licensees.

The Texas Real Estate Licensing Act Section 1101.002(1)(A)(x) prohibits an unlicensed person, on behalf of another, from controlling the acceptance or deposit of rent from a resident of a single-family residential real property unit in exchange for, or with the expectation of, a commission or other valuable consideration. TREC Rule 535.4(g) further defines controlling the acceptance or deposit of rent, stating that a person must be licensed if:

1. The person has the authority to use the rent to pay for services related to management of the property; or

2. The person has the authority to deposit the rent into a trust or bank account and sign checks or withdraw money from the account.


What must be done to cancel title? (updated Jan. 1, 2002)

An owner must complete many steps to surrender title to a manufactured home. Check with TDHCA to learn more (800/500-7074).


Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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